Federal Automotive Innovation Fund a Step in the Right Direction, CAW says

January 7, 2013, 2:45 PM EST


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The Canadian Auto Workers union has reacted positively to the federal government's renewal of the Automotive Innovation Fund, which will provide $250 million in repayable funding to support future capital investments in the auto sector.

"This is an important affirmation that the federal government remains committed to attracting future investments in this vital industry," said Ken Lewenza, CAW President.

"This fund is an important tool in our industrial policy toolbox, and its renewal sends a signal to automotive manufacturers that Canada is in the game," he added.

However, the CAW President stressed that the fund alone will not be sufficient to preserve Canada's future share of auto investment and production.  "International experience shows that the most successful auto jurisdictions are those which pursue multi-pronged auto strategies," he said.  "We need a comprehensive, integrated federal-provincial strategy to attract investment and support Canadian jobs."

In addition to financial support for new investments, such a strategy should also feature negotiated commitments to Canadian content, fair trade policies to reduce large auto trade deficits, active procurement strategies, and other policy levers.

Last year the CAW released a major policy paper on the need for a national auto policy, titled Rethinking Canada's Auto Industry.  It advocated a ten-point strategy to ensure a proportional Canadian share of high-productivity, well-paying jobs in auto assembly and parts production.  The full 50-page document is available at www.rethinktheeconomy.ca.

Lewenza noted the historic pattern of cost-sharing between the federal and Ontario governments in supporting major auto investments, and challenged Queen's Park to confirm that it will continue that traditional partnership.

Lewenza also challenged the federal and Ontario governments to ensure that their future support for the auto sector is tied to enforceable commitments by the auto producers regarding their production levels in Canada.  "Industrial policy needs both a carrot and a stick," Lewenza said.  "Supported companies need to make clear and binding commitments regarding their long-run presence in Canada, in return for the public support they are receiving."

Lewenza pointed to the successful Canadian footprint commitments contained in the 2009 restructuring agreements with General Motors and Chrysler, but which expire in 2017.  "Those footprint commitments meant that Canada's share of North American vehicle production actually increased through the financial crisis.  They are a model that should be replicated in our future investment policies."

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